2 Must-Have B-to-B Metrics
Smart CEOs know two essential B-to-B metrics to successfully grow their businesses:
- contribution per order (CPO) for new customers; and
- life-time value (LTV) of existing customers.
They may sound difficult to figure out, but the process is actually easy.
The CPO metric for new customers is a close approximation of your cost to acquire a new customer. Those two metrics aren't exactly the same. However, it's usually easier to calculate your CPO, which you determine by segment of your mailing. The formula by segment is as follows: (sales - cost of goods sold - promo cost) / total number of orders = CPO.
A columnist for Retail Online Integration, George founded HAGUEdirect, a marketing agency. Previously he was a member of the Shawnee Mission, Kan.-based consulting and creative agency J. Schmid & Assoc. He has more than 10 years of experience in circulation, advertising, consulting and financial strategy in the catalog/retail industry. George's expertise includes circulation strategy, mailing execution, response analysis and financial planning. Before joining J. Schmid, George worked as catalog marketing director at Dynamic Resource Group, where he was responsible for marketing and merchandising for the Annie's Attic Needlecraft catalog, the Clotilde Sewing Notions catalog, the House of White Birches Quilter's catalog and three book clubs. George also worked on corporate acquisitions.